C_NCENTRATE 905: Netflix future, post-humous AI, Uber, jam sessions, investment field right now + more
WHAT IS REALLY GOING ON AT NETFLIX
While the UK quietly loses its collective mind politically, the tech world is equally at odds. Rising prices, post-humous AI interviews, mass firings, big lawsuits, SF office closures, poor earnings, and the seemingly never-ending Elon-ter debacle. The big news this week? This is just the start of a poor Q4 for many of the big platforms and SV giants. Such is the economic outlook on both sides of the pond and the eastern hemisphere. Netflix has the answer, an ad tier and shaking down non-subscribers (something it should have done years ago).
Where are they now? Q3 revenue paints an ‘ok, but not great’ picture. The company beat expectations; revenue up 5.9% YoY to $7.93B, $1.4B net income, down from $1.45B YoY, 2.4M net global subscribers added, vs. 1.09M est.; stock is up 10%+. A good week. In the same week, the company announced it will; stop announcing subscriber numbers (never because there’s such a thing as too much good news…), start curbing non-subscribers who offer their account to four others at no cost in 2023, launch the ad tier for $6.99/month in the US and debut on November 3 in 12 countries.
Netflix is a changing beast that is suffering massive competition from bigger-budgeted competitors. Now very much into gaming it seems, expect a lot of moves from Netflix to show investors and the world it’s still worth their time rather than pinging on and off when Stranger Things adds a series. The ad tier is unlikely to bring in a massive amount of cash for them. The savings for a worse experience is…not really the future anyone wants and equates to around $30 a year. Bloomberg cites an employee that says ‘Everyone agrees Netflix will be fine, everyone agrees it’s just not sexy/special anymore’.
SO WHAT?
__ DO __ Know that they are in a serious period of their life. The stock is on track for its first down year since 2014. Put another way, all the gains from the last five years have now gone… While the password crackdown is unlikely to dent their figures, getting new ones is getting harder and harder thanks to economic realities for 2023/4 let alone moves by Disney, Amazon etc. // __ DON'T __ Forget Netflix can innovate and see opportunities where others do not. The company sat pretty for years, and people still want to watch content while the world crumbles around them. Don’t count them out reinventing themselves or the game - it’ll be tough to do but not impossible.
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